Agenda item

Cabinet Member – Councillor Dyfrig Siencyn

 

To consider a report on the above.

 

To accept the report and to note the observations.

 

The Leader and Ambition North Wales officers were welcomed to the meeting.

 

Submitted – the report of the Leader on the Quarter 3 2022-23 performance of the North Wales Growth Deal, following the committee's request.

 

The Leader outlined the context by providing a brief update on the work of the Growth Deal, some of the background of establishing the North Wales Economic Ambition Board, along with details of different schemes that were relevant to Gwynedd.  The Operations Manager then provided an overview of the Growth Deal and the main highlights of 2022-23.

 

Members were given an opportunity to ask questions and offer observations. 

 

It was enquired how the Ambition Board intended to draw up a language policy for the Trawsfynydd project to ensure that the development and the workforce would not Anglicise the area.  In response, it was noted:-

·         That this was a project that wholly relied on UK Government investment, and that there was no certainty on that.

·         In terms of a language policy, the Egino company would soon hold a workshop to examine the social benefits, including the linguistic benefits.

 

It was noted that the greatest risk in terms of delivering the objectives of the Growth Deal was ensuring public and private sector investment, and it was enquired what steps it intended to take should the capacity of those sectors to invest reduce over the next few years due to the current financial situation.  In response, it was noted:-

·         That economic circumstances had changed immensely since the Growth Deal was agreed in 2010, and that the financial crisis was a challenge that faced us on a regular basis where there was a contribution from the private sector.

·         The Business Delivery Board, which had representatives from the private sector, was meeting to discuss projects regularly, under the guidance of Askar Sheibani, who ran his own global digital business and who was very enthusiastic for the whole of north Wales.

·         The only assurance that could be given at present was that this was a matter that was being addressed, and it was believed that there was a desire among the private sector to invest, provided that the circumstances were right.

·         The North Wales Ambition Programme Office worked very closely with the private sector on specific projects, and that the sector was currently looking to invest. 

·         It was acknowledged that there was a risk that the capacity to invest could change over coming years, and the Programme Office worked very closely with both Governments on this.  More public sector investment would possibly be required should the private sector investment not be there but, at present, the situation seemed quite positive.

·         The Programme Office was developing a strategy with the Business Delivery Board to ensure that it was possible to bring this strategy forward, and one of the specific things that had been undertaken as part of the demand for new projects to the £30m fund was to place a strong emphasis on the ability of businesses to invest as part of this process.

·         This was a large percentage of what the assessment would be so that it was possible to ensure that any projects coming forward could proceed quickly to deliver.  It was hoped that this would reduce some of the risks, but the greatest risk to be able to deliver the benefits of the Growth Deal was bringing the funding forward to invest in these projects, and this would be a risk during all of the deal’s period.

 

It was suggested that the Growth Deal seemed to be the A55 Deal and it was enquired whether Meirionnydd would benefit from any schemes, with the exception of the Trawsfynydd project.

 

In response, it was noted:-

·         It was certainly not the A55 Deal and the fundamental aim was that any wealth generated from the Growth Deal would be shared across the whole region.

·         Although some schemes were geographical and that a number of these projects were digital, and that this was essentially important to rural areas in terms of easy access to digital services.

·         There were no other specific schemes in Meirionnydd under the Growth Deal, but there were other more local funds that rural areas could take advantage of, such as the Community Energy Fund. 

 

It was noted that the Leader would certainly ensure and fight to obtain jobs for Dwyfor and Meirionnydd and best wishes were extended to every project.

 

Referring to the Tracker Table - Overview of delivery (December 2022) on page 32 of the agenda, a request was made for more details and more certainty regarding exactly how many jobs had been created thus far.

 

In response, it was noted:-

·         That the table indicated the individual targets for the projects that created the new jobs towards the target of 4,200.

·         The only live project so far was the Digital Signal Processing Centre, which had led to six new posts in Bangor University.

 

It was noted that one of the greatest risks facing the Ambition Board was that project costs increased and it was enquired how much of the additional funding to this £30m would be realised in north-west Wales.  It was suggested that there was an opportunity for Gwynedd to propose innovative projects as a result of withdrawing the Bodelwyddan Key Strategic Site and the Llysfasi Net Zero Farm projects from the Growth Deal, and it was enquired whether a discussion was being held about this.

 

In response, it was noted:-

·         After the application submission period ended on 27 March, the Programme Office Team would score the projects based on practicality, how soon they could be implemented and how many jobs would be created.

·         It was already known that one or two projects would be submitted for Gwynedd and more would certainly become apparent by the closing date.

·         The method of assessing applications did not refer to their geographical site.  It was hoped that the projects would span all counties in north Wales, but the tension between the regional benefit and the locally specific benefit was part of a difficult discussion that the six Leaders would have to hold in order to reach some political consensus on the matter.

 

The fact that the Bryn Cegin Park Bangor project was finally progressing was welcomed, but as hopes had been raised so many times during the past twenty years, it was enquired whether there was now a real plan to attract good jobs to the units that would be constructed on the site.  It was also enquired whether the entire plan was now at risk in light of the recent announcement about establishing a Free Port in Holyhead.

 

In response, it was noted:-

·         It was frustrating that there had been no development at Bryn Cegin Park so far, but good progress was being made with the Welsh Government in terms of the joint venture.

·         The financial risk had been mitigated with provisions in the agreement that the Welsh Government would make an additional financial contribution should the construction costs exceed a specific level.

·         The Welsh Government would go out to tender within the next week to appoint a professional team to lead the work.

·         It was anticipated that there would be planning permission on the site by the end of the year, with the Final Business Case on the way to be finally approved by the Board.

·         It was expected that the main contractor would be on the site by the end of Quarter 1 in 2024, or possibly early in Quarter 2 of 2024, with the construction work being completed towards the end of 2024 or early in 2025.

·         It was believed that there was considerable demand for this type of units by local businesses and small and medium enterprises mainly in the north-west Wales area.  It was believed that there is demand from companies that wished to expand, therefore, on the whole, many of the jobs that would be created would be high value jobs.

·         It was aimed to create jobs that would offer good salaries and good training opportunities, with benefits from the construction work and the jobs created on the site mainly focused in the Bangor area.

·         £6m of Growth Deal funding was being invested in Bryn Cegin Park but as construction costs had been so unsettled during the past two years, and to mitigate the financial risk to all partners, it had been provided in the agreement that the Welsh Government would make an additional contribution towards capital funding. 

·         It was currently difficult to anticipate what impact the announcement about the Free Port would have, but it was not expected that this would be a direct threat to existing businesses in the Bangor area, as it was more likely to affect external investment.

·         Although we had supported the Free Port bid, the question regarding losing businesses to Anglesey, due to the improved environment that would be there, was a clear question and a matter that needed to be monitored.

 

On a point of clarity, a request was made for confirmation that the total expenditure in Bryn Cegin Park was £6m, and that there was no match funding, with the exception of additions should the costs be more than expected.  Also, although it had been noted that it was not believed that the Free Port would be a threat to existing businesses in Bangor, there was concern that any new investment would go to Anglesey.  It was also asked whether the expenditure profile of the Growth Deal had been examined and what were the implications for councils regarding payments to serve any loans that would have to be given.

 

In response, it was noted:-

·         That the UK Government would pay over ten years, rather than over the 15-year period originally agreed.  This greatly assists the expenditure profile, and is a matter that comes up when discussing the finance of the Ambition Board.

·         £6m was the contribution of the Growth Deal to the developments in Bryn Cegin Park and one of the greatest risks seen in recent years was the increase in cost.  It was hoped that those costs were now beginning to settle but it had been a substantial threat to a number of projects, and this was why additional funding had to be given to three projects.

·         The expenditure and loans profile of councils was reviewed annually and there was a number of factors that could affect the borrowing costs for partners.

·         The costs would be divided between the councils and other partners, and also the universities and colleges.

·         We were financially benefiting from the situation at present as there had been a delay in the expenditure profile. The funding that had come from both Governments was earning interest, which would help with the risk of increasing costs over the coming years. While moving from a situation where we have money in the bank to a situation of needing a loan, we would feel this in terms of higher costs but the situation was currently slightly more positive than what had been modelled at the beginning of the Growth Deal in 2020 as the funding was received sooner from the UK Government, and due to the delay and accumulated interest. The situation was being reviewed annually with the intention, if possible, to keep any borrowing costs for our partners as low as possible.

 

Referring to the Smart Energy Scheme, it was noted that much more investment was needed in infrastructure before being able to implement such projects.

 

In response, it was noted:-

·         It was agreed that the restrictions in terms of the grid, or costs to connect to the grid, were one of the main obstacles to enable such schemes to be brought forward.

·         In theory, the investment made here could be used to provide infrastructure to enable projects to happen in a method similar to what was being invested in the Morlais Project to support the infrastructure that enabled the tidal energy to be captured.

 

It was enquired to what extent it could be comfortable that the density of jobs deriving from the Growth Deal would be jobs for local people, rather than providing opportunities for a population from beyond the area. It was also suggested that training and career paths needed to be planned on a micro level, so that we almost examine the careers of individuals here.

 

In response, it was noted:-

·         That the indigenous community were full of entrepreneurs despite the general tendency to think that rural Welsh speakers could not innovate themselves and be enterprising.  

·         There was a need to create the opportunities for those entrepreneurs to thrive, and from a skills' viewpoint, that this almost came down to the micro, and was being provided by people who were very local. There would be no people here to speak Welsh if opportunities were not given to people. There was a need to be confident for the future and it was hoped that our indigenous people would seize the available opportunities.

 

It was noted that there was no mention of the Ambition Board anywhere, e.g. Business News of the Daily Post, Golwg, Gwynedd News etc. and it was suggested that Ambition North Wales needed to do more to market itself to Gwynedd residents.  It was also enquired whether there was a panel of successful business people objectively examining the Board's plans to provide a professional opinion on the viability of schemes.

 

In response, it was noted:-

·         That the Business Delivery Board challenged the projects in detail. 

·         It was difficult to gather the opinions of micro businesses and that maybe more innovative ways of contacting those small businesses should be considered.

 

At the end of the discussion, the Leader noted:-

·         That Cyngor Gwynedd accommodated the work of the Ambition Board, but the work of the Board would soon transfer to the Corporate Joint Committee, and he greatly hoped that the work of the Board would not be impaired in any way as a result of that statutory move.

·         The role of Ambition Board Chair was more than chairing Board meetings only, and that he/she was seen as the representative of north Wales at regional and national meetings.

 

The Chair thanked the Leader and officers noting that everyone was pleased to see some of the projects beginning and coming to fruition.  He also noted that it would be interesting to see what new projects would be submitted before the Programme Management Team next week, and he expressed his hope that there would be schemes of benefit to Gwynedd, and to South Meirionnydd.

 

RESOLVED to accept the report and to note the observations.